Downtown Boutique Owner David Cohen Busted for Wage Fraud

February 23, 2010

David Cohen, whose downtown stores include the Mystique, Madness, Exstaza, and Amsterdam boutiques, was arrested and charged with cheating his workers out of $1.5 million in wages by the office of state attorney general Andrew Cuomo.

Cohen was also accused of ordering workers to clam up when investigators from Cuomo’s office came knocking.

“Workers were not only ripped off, but were also intimidated to make sure they stayed quiet,” Cuomo said in a statement. The AG also filed a civil suit, seeking the $1.5 million in back wages plus damages.

According to the criminal complaint, workers at Cohen’s shops were routinely made to work 11-hour days, at a clip of six or seven days a week — without receiving required overtime. Several workers cited in the complaint were paid with checks for their first 40 hours of work, and the balance in cash, in an apparent effort to avoid leaving a paper trail of the labor law violations.

Last September, the complaint alleges, Cohen got somewhat bent out of shape when he learned that labor investigators were asking questions about his employment practices.

“What is going on with the Labor Department?” Cohen demanded of an employee who had worked at his Madness Boutique on Canal Street for three years. “We got a paper from them. You have to tell me if you see something.”

A few days later Cohen allegedly got tougher, while offering his perspective on trade unions.

“I know you’re behind the Labor Department and union stuff,” he told the same worker. “You know they just take the employee money and a few people at the top get rich. If it’s not you, show me your phone. …I can’t stop this but I can slow it down. What do you want from me? $10,000? $20,000? $50,000? Call the union and find out who’s going to them. …Bring me information by Wednesday or don’t come back.”

The worker in question — identified only as Employee 11 in the complaint — made a quick career decision and decided neither to produce the information nor return to work.

The union also isn’t identified, but the Retail, Wholesale and Department Store Union, in partnership with a local group, the Retail Action Project, has been campaigning against wage violations at downtown retail stores.

Laura Brevetti, an attorney representing Cohen, did not return a call.

‘The World Trade Center was conceived by vested interests, promoted by pressure groups, brought into being by a handful of powerful men for reasons of monetary gain or personal pressure, and indirectly subsidized by the taxpayer’